Question of the Week

Ben is employed by the underwriter of the PCO mutual fund. His job is to visit broker-dealers which distribute the mutual fund and encourage the registered representatives to sell the fund’s shares to their customers. As a part of his “wholesaler’s” job he typically gives reminder-type gifts to representatives, and sponsors incentive contests for tickets to sporting events. Which of the following would be violation of the NASD Rules regarding gifts?

I. An insulated coffee mug bearing the fund’s logo
II. A watch with the fund’s logo, valued at $125
III. A pen and pencil set with the fund’s logo, valued at $50
IV. Season tickets to an NFL team’s games

A) II only
B) IV only


The correct answer is C)

NASD Rule 2710 addresses what has been called “special deals”. While gifts of $100 or less per year and “occasional” tickets to sports and social events are permitted, season tickets and the $125 watch would not be allowed.